Sorrell Continues to Talk-Up Online

30 May 2007

LONDON: Sir Martin Sorrell's famously cautious view of future events (think 'bath-shaped' recessions) ensures that his frequent forays into prognostication are faithfully reported in the media, rarely disappoint, and deliver consistently pleasant surprises to WPP Group stockholders.

Recently, however, the adland knight has been in uncharacteristic rah-rah mode about online advertising. With regard to which his recent pronouncements at industry talkfests and in interviews with the press suggest (perish the thought!) that he is talking up the medium.

Not entirely surprising, perhaps, given WPP's recent $649 million (€482.46m; £327.03m) acquisition of US-headquartered digital media specialist 24/7 Real Media. Plus its investment of unknown (but probably significant) value in the digital capabilities of WPP's media arm GroupM.

In an interview with Britain's The Times, Sorrell drew attention to the increasing switch of advertising funds from traditional media to online, creating a "fundamental shift" that will irreversibly change the way in which TV broadcasters earn their crusts.

Nothing new about this, of course, as every sixth-grade business studies student has been aware for the past five years.

What is new, however, is this year's inferno of hype, sparked by fire-raisers from the various national outposts of the Internet Advertising Bureau, fanned by print media's apparent death wish, and massive vested digital interests.

But Sorrell is hedging his bets: "Television is under severe pressure at the moment from the internet. There has been a fundamental shift and the pace will quicken, but predictions of a depression in traditional media have gone too far. Television advertising is not going to disappear. It still has pulling power, but the balance will switch.

"Definitions are difficult now. The boundaries between what is the internet and what is TV are becoming more blurred. As a result, media decisions are becoming more complex and puzzling. It is not that simple to separate the two any more."

Meantime, the IAB's UK office - in Panglossian mode as its remit requires - is predicting that online could overtake television in revenue terms by 2010.

Given that the medium currently accounts for slightly more than 10% of all UK marketing spend, compared with TV's 24.1%, this is unlikely but not impossible.

Claims IAB/UK ceo Guy Phillipson: "The internet is the most accountable medium ever invented - that is why it is so attractive."

A claim with which quaint olde-worlde direct mail marketers would probably disagree.

Data sourced from The Times (UK); additional content by WARC staff